The Business Council welcomes the Government’s announcement of a competition review and taskforce intent on improving Australia’s dwindling productivity, Business Council chief executive Jennifer Westacott said.
“The Business Council’s report, Seize the moment, pointed to Australia’s falling economic dynamism, the secret sauce of economic growth, laden with a heavy regulatory burden, rising risk aversion, increasing policy uncertainty, deteriorating housing affordability, a slower rate of globalisation and falling foreign direct investment.
“Although the Business Council supports the government’s intent, we are cautious about the risks to the economy if merger activity is stifled by overzealous and uncertain regulation at a time where Australian industry needs to scale to compete globally.
“Mergers are a critical aspect of competitive capital markets. The market for corporate control puts pressure on managers to continually improve their businesses and creates opportunities for entrepreneurs to sell their businesses to others that are better placed to grow it to the next stage.
“Business drives dynamism in the economy through investment and innovation. A lack of dynamism impedes productivity and makes it harder for Australia to move to the frontier.
“There is a real risk to growth and productivity if merger review processes impede desirable mergers due to the cost, delay or unduly conservative competition assessments.”